Budget News and Information: 2012

2/23/2012: AL Governor Outlines Roads and Bridges Plan

Governor Robert Bentley on Thursday outlined his plans to upgrade roads and bridges throughout the state. Making such improvements, the Governor said, will improve the quality of life for Alabama citizens, and it will also help the state recruit additional jobs from industries that depend on a solid infrastructure.

3/8/2012: AL Governor Proposes Cutting Pensions for New State Employees

The state would save $5 billion over 31 years in estimated pension costs under a plan announced Wednesday by Governor Robert Bentley and legislative leaders. The plan would save the state money by reducing pension benefits for employees of state agencies and public schools, colleges and universities who are hired starting in early January 2013.

3/22/2012: Both House and Senate Committees Approve Bill to Change Legislative Pay

Committees in both chambers of the Alabama Legislature passed bills to tie state lawmakers' pay to the median household income and remove the elected officials' power to set their own salaries. Each bill would also change the way lawmakers receive reimbursement for expenses, by submitting signed vouchers, similar to the requirements of other state employees.

The 2012 Legislative Session is in its seventh week and they are no closer to solving the $360 million budget deficit facing than when the session began in early February. Some observers predict that a special session may be needed to resolve the shortfall, which amounts to a 23 percent cut in revenue for the General Fund.

4/12/2012: Legislature Passes Bill to Restore Settlement Funds for State Tuition Program

The Alabama Legislature recently approved a bill aimed at restoring a settlement over the state's prepaid college tuition plan. The board of the Prepaid Affordable College Tuition plan reached a settlement to pay tuition rates at 2010 levels rather than current rates, but that decision was struck down by the Alabama Supreme Court.

The Alabama State Senate passed legislation by a vote of 28-6 that would would set the compensation of state legislators to Alabama's median household income, which $40,474 in 2010. Legislators' income would rise and fall depending on the household income. Some observers question the legality of the legislation and predict a lengthy conference process with the State House because a provision was added that would immediately suspend a 2007 pay raise received by the Legislature, and would then authorize a public referendum in 2014 to amend the state constitution to repeal the pay raise.

4/24/2012: House Panel to Consider Raising Cigarette Tax to Close Medicaid Funding Gap

The threat of deep cuts in state funding for Medicaid, which provides health care for more than 900,000 low-income people in the state has led the House Ways and Means Committee to consider legislation to increase the per pack tax on cigarettes by $1. Under the House-passed state operating budget for next year, Medicaid would get $400 million from the General Fund, a significant 30 percent cut of $175.4 million.

5/3/2012: Senate Passes Legislation to Allow Bankrupt County to Revive Local Tax

The Senate approved a plan by a vote of 16-10 to allow Jefferson County, which is currently in Chapter 9 bankruptcy, the ability to collect a new occupancy tax to help relieve the beleaguered municipality to help pay off more than $4 billion it owes to creditors. The legislation could mean an additional $60 million for the county and allows local officials unfettered use of local taxes that are often tied to specific, fixed purposes like sewers.

House and Senate lawmakers have passed two different competing versions of an education budget. With the legislative session schedule to end soon, lawmakers have little time to resolve the policy and small spending differences between them. The House version would set next year's spending levels at $5.51 billion from the Education Trust Fund, a cut $118.4 million, 2.1 percent, from this year. The Senate plan is slightly smaller, but both bodies must also consider proposals that would lengthen the summer breaks for students in public schools.

Budget News and Information: Previous Budget Cycles

6/9/11: Budget still up for discussion in the legislature

Both state budgets for next year and a plan to make more than 130,000 public employees pay 2.5 percent more of their paychecks for pension coverage face deciding votes today, the last day of this year's regular session of the Legislature.

5/28/11: Budgets sent to Governor with much work to be done in a balancing act

The two state budgets for the next fiscal year have gone to Gov. Robert Bentley for consideration, but work remains on balancing them. The Legislature gave final approval to the $5.88 billion Education Trust Fund budget and the $1.77 billion General Fund budget. Both were sent to Bentley on Wednesday. He has until Wednesday to act on them.

Noted most for its $30 million in budget cuts, the Alabama Legislature came to budget resolutions on revenues and costs. The total budget has an estimated 1.5% cut from all state agencies, with the exception of the judicial system.

The Alabama House has approved a bare-bones, $1.8 billion budget to fund most non-education state services in a 88-12 vote. The budget passed with funding cuts to most state agencies and tourist attractions.

The AP reported today that all general fund expenditures, which excludes education, will be moving to the floor for debate in the coming days. General fund expenditures for services are expected to be severely cut.

The Montgomery (AL) Advertiser (4/12, 35K) reports, “Fire protection in rural areas, programs to keep seniors out of nursing homes, healthcare for children and restaurant inspections are among the areas that will likely be cut as lawmakers move forward with continued budget cuts because of the economy.” Notably, the “Alabama Senate passed a $1.8 billion General Fund budget Thursday that now goes to the House for consideration. While the budget for most non-education functions of state government protects Medicaid, the prison system and mental health, some departments are cut by 45 percent or more.”

2/13/11: Officials expect state worker layoffs

Some Alabama officials do not see any way they can bal­ance the budget for next year without laying off state em­ployees. They're forecasting anoth­er hole in the state General Fund budget, which pays for Medicaid, state prisons, pub­lic safety, public health and most other non-education functions of state govern­ment, and do not believe there are other obvious places to make substantive cuts.